Maine's LePage Has History with Reducing Medicaid Rolls

The governor, who wants to cut Medicaid enrollment after the Supreme Court ruling, proposed a similar plan earlier this year.

As the New York Times reported Thursday, Maine Gov. Paul LePage is buckling down for a fight with the U.S. Department of Health and Human Services (HHS) about whether the Supreme Court’s ruling on the Affordable Care Act (ACA) allows state to not only opt out of the law’s Medicaid expansion, but also cut their existing Medicaid rolls.

But this isn’t the first time that LePage and the Obama administration have clashed over Medicaid enrollment. After LePage proposed reducing Medicaid eligibility in his FY 2013 budget in December, HHS officials sent a letter to state legislators in January, saying that passing the governor’s budget would violate the ACA’s maintenance-of-effort provision, which required states to maintain their Medicaid eligibility standards after the law passed in 2010.

“The purpose of Medicaid is to provide high-quality health care coverage to needy individuals whose income and resources are insufficient to meet the costs of necessary medical services,” Cindy Mann, then-director of the Centers for Medicare and Medicaid Services (CMS), wrote in the letter. “Reductions in eligibility solely for budgetary purposes would not be experimental, pilot or demonstration projects that further the purposes of the program.”

Mann informed Maine legislators that the Obama administration would therefore not grant waivers to the state to roll back Medicaid eligibility, as LePage had proposed. The legislature rejected that aspect of the budget.

LePage’s budget included cuts in coverage for families above 133 percent of the federal poverty level (the ACA’s new threshold is 133 percent for all families and individuals). Maine had previously covered families up to 200 percent. He proposed dropping coverage for 19 and 20-year-olds and reducing coverage for childless adults. LePage also recommended eliminating some optional benefits that Maine had previously instituted, such as chiropractic and dental care.

LePage argued that, with a projected $101 million Medicaid budget shortfall for FY 2013, such cuts were necessary. “Maine must move its Medicaid program to align with national averages,” read the introduction to the governor’s budget proposal, “away from a low-income health insurance program and back to a sustainable program that protects Maine’s most vulnerable.”

He noted that only 15 states cover 19 and 20-year-olds, and that only seven states cover childless adults as extensively as Maine does. The governor’s office estimated that LePage’s budget would save the state up to $207 million in FY 2013.

“Maine believes the Supreme Court decision confirms that states have the flexibility to manage their Medicaid program without risking the loss of federal funds,” Adrienne Bennett, LePage’s spokeswoman, told the Times in an e-mail, although she did not expand on the state’s legal reasoning.

The Times reported that LePage plans to eliminate Medicaid coverage from 133 percent of the federal poverty level to 100 percent, which would appear to go farther than his FY 2013 budget..

According to Governing’s analysis of Urban Institute data, Maine has 17,000 uninsured people who fall within that range. If the state were to fully adopt the Medicaid expansion to 133 percent of the federal poverty level – which seems unlikely at this point – it would cover up to 64,000 currently uninsured people.

HHS Secretary Kathleen Sebelius wrote in a letter to governors last week that the Court’s ruling did not affect any of the ACA’s provisions except for the Medicaid expansion – which would presumably mean that the Obama administration believes the maintenance-of-effort requirement still applies.

LePage has threatened to take HHS to court if it challenges his plan to cut Medicaid rolls.

The map below details each state's uninsured population that could be eligible for Medicaid and each state's expected spending for the ACA's Medicaid expansion. Darker states have higher percentages of uninsured residents who are potentially Medicaid eligible. Click a state for additional information.

Zoom out to view Alaska and Hawaii data.

SOURCE: Medicaid eligibility estimates obtained from Urban Institute analysis of American Community Survey and Integrated Public Use Microdata Series data. State spending figures obtained from Medicaid Coverage and Spending in Health Reform: National and State‐by‐State Results for Adults at or Below 133% FPL, published May 2010 by the Kaiser Family Foundation.